Wednesday, 11 July 2018

Theories of Surplus Value, Part II, Chapter 17 - Part 13

Returning to the weaver with the £1,000 of surplus value that is converted into variable capital, this may either employ more workers or the existing workers may be paid overtime, so that the working-day is extended. In either case, more yarn will be required. If more workers are employed, more machines may be needed, or, alternatively, the existing machines may be utilised more extensively by the introduction of additional shifts. 

If either the working-day is extended, or additional workers are employed to work additional shifts, the existing machines will wear out more quickly, as a result of their more extensive use. They will give up the use value and value more quickly via wear and tear, but this will also be spread over a larger mass of output. The fact that the weaver buys these additional commodities, yarn, auxiliary materials for the machine, coal for the steam engine, is essentially no different than had the weaver used their surplus value to buy consumption goods. It only requires that resources elsewhere in the economy go to the production of these additional means of production rather than means of consumption. In essence, there is no difference here, as far as this accumulation is concerned than any other instance of where commodities are used as capital rather than as revenue, i.e. for the purpose of productive rather than personal consumption. 

If the commodities that the weaver requires are not available, they will have to place orders for them, and wait for their delivery. In that case, the suppliers of these commodities will have to engage in their own process of accumulation, and obtain all of the additional productive-capital required. 

“If the raw material (flax) were only produced to order [as, for instance, indigo, jute etc. are produced by the Indian Ryots to orders and with advances from English merchants], then the linen weaver could not accumulate in his own business during that year. On the other hand, assuming, that the spinner converts the £5,000 into capital and that the weaver does not accumulate, then the spun yarn— although all the conditions for its production were in supply on the market—will be unsaleable and the £5,000 have in fact been transformed into yarn but not into capital.” (p 482) 

In each sphere, and indeed within individual firms, within each sphere, capital is accumulated for numerous reasons. The accumulation of an amortisation fund has already been referred to, but funds of surplus value accumulate, because realised profits can only be reinvested when they have grown to a minimum size, determined by the technical composition of capital, to enable expansion. Other funds exist to cover variations in both the firm's cash flow and the cash flow of the capitalist himself, required for personal consumption. All of these funds of money-capital become available for use as bank credit. The owners of this money-capital, who cannot use it immediately, as productive-capital, themselves do not want it to sit doing nothing for them, and so make it available as loanable money-capital, which returns interest to them. But, in addition to these owners of money-capital all of that class of rentiers, and of landlords, who receive large revenues as interest and rent, thereby also amass large reserves of loanable money-capital, which then becomes available for productive-capital to borrow to finance capital accumulation. 

“Every capitalist will however prefer to invest his accumulation as far as possible in his own sphere of production. If he invests it in another, then he becomes a moneyed capitalist and instead of profit he draws only interest— unless he goes in for speculative transactions. We are, however, concerned with average accumulation here and only [assume] for the sake of illustration that it is invested in a particular sphere.” (p 482) 

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